Best Online Cryptocurrency Exchanges for Retail Investors

As Bitcoin continues to enter the mainstream, many people wonder where, how, and when to start investing in cryptocurrency.
This shouldn’t come as a surprise, though, as the value of the cryptocurrency market reached over $2.9 trillion for the first time in November 2021. The crypto market capitalization doubled in just a few months, marking an impressive milestone as retail and institutional investors quickly flooded into the space.
Yes, today’s digital currency market's fast-paced growth is impressive, causing quite a frenzy in interest. Many people still struggle to understand where to buy crypto and how to keep their digital assets safe, which is understandable since many options exist. But this process doesn’t have to be confusing.
Below is a list of newcomers' five best cryptocurrency exchanges, followed by easy-to-understand explanations on buying, storing, and selling cryptocurrency. Some exchange platforms offer advanced features, such as earning interest for users looking to capitalize on their digital assets.

What is a cryptocurrency exchange?

Before digging deeper into some of today’s best crypto exchanges, it’s important first to understand what a cryptocurrency exchange provides for its users. Unlike traditional brokerage accounts, exchanges are a different type of trading platform using blockchain technology, often offering crypto wallets to store your virtual currency. Also unique is unlike the stock market, crypto markets don't close. You can buy it 24 hours a day and watch the value well into the night. (It also has high volatility.)
While a crypto exchange is a platform for buying and selling cryptocurrencies, exchanges offer price discovery through cryptocurrency trading activity and secure storage for crypto. Although this is pretty straightforward, hundreds of crypto exchanges exist, so users must research suitable platforms.
For instance, crypto exchanges offer an array of digital assets but do not offer access to all coins. While most exchanges support Bitcoin (BTC) and Ether (ETH), some exchanges let users buy alternative cryptocurrencies, also known as “altcoins.” The ever-popular Dogecoin (DOGE) is an example of an altcoin.
Security is also a significant feature when determining which crypto exchange to use. Unfortunately, online crypto exchanges are prone to hacks. Recent statistics show that in 2022 $3.8 billion worth of crypto was stolen from exchanges. This number was even higher in 2021, reaching $14 billion.
Although this is the case, security measures have improved over the years. The majority of crypto exchanges today require two-factor authentication, also known as “2FA,” which is a method that helps ensure a user's identity. Know your customer, or KYC has also become necessary for many crypto exchanges, as this verifies a customer’s identity. KYC processes often require users to upload a photo of their driver's license and confirm their personal information. While some users find this invasive, others understand it’s an important safety mechanism.
There are also several fees associated with crypto exchanges. It’s common for exchanges to charge deposit and withdrawal, trading, trading spreads, and margin fees.
Finally, it’s important to note that many cryptocurrency exchanges are unregulated in most jurisdictions. Regulated exchanges are the best for users seeking secure and easy ways to buy, sell and store crypto. All of the exchanges mentioned below are regulated within the United States.

The 5 best cryptocurrency exchanges for new investors

Now that you better understand some of the different features offered by crypto exchanges, it’s time to consider which one is right for you.
Below are five cryptocurrency exchanges that make buying, selling, and holding crypto safe and easy. The exchanges are not listed in any particular order and only provide an overview of certain features, including the number of digital assets supported, associated fees, security measures, and downfalls to consider. With this in mind, conducting research is important if you want to learn more.

Coinbase

Headquartered in San Francisco, Coinbase is the largest U.S.-based cryptocurrency exchange. Coinbase supports more than 250 cryptocurrencies. According to the Coinbase website, the exchange complies with all applicable laws and regulations in each jurisdiction. United States Coinbase, Inc. – the company which operates Coinbase in the U.S. – is licensed to engage in money transmission in most U.S. jurisdictions (all U.S. states except Hawaii).
A minimum amount of $2 is required to open a Coinbase account. Coinbase offers multiple account types designed to suit various users’ needs. A beginner user will likely want to start with a retail or consumer account. This provides the best experience for a new user in the crypto space, ensuring quick and easy conversion of fiat currency to any cryptocurrencies supported by Coinbase. Coinbase users can also earn interest through Compound.
The crypto trading and transaction fees on Coinbase vary between 0.5% to 4.5%. This depends on the payment method, cryptocurrency type, transaction size, and platform. It’s also important to note that fees vary considerably by country and financial instrument. Coinbase maintains a list of fees associated with transactions here.
Fees for different payment types in the U.S. vary. For example, a U.S. bank account or Coinbase wallet will incur a 1.49% fee. Using a debit card to buy crypto on Coinbase will incur a hefty 3.99% fee. An ACH transfer (direct deposit) is free. A wire transfer, however, will incur a fee between $10 to $25.
Regarding security, Coinbase has a KYC process, meaning users must submit a valid government-issued ID (with photo) and a residential address. Coinbase may ask for enhanced due diligence or a source of funds for larger deposits with new customers. Coinbase also provides 2FA and other standard security practices.
While Coinbase is a great crypto exchange for both newcomers and advanced users, high exchange fees and poor customer service have been mentioned in reviews.

Binance.US

Binance.US was launched in September 2019 as a digital asset marketplace powered by one of the world’s largest cryptocurrency exchanges, Binance. Binance.US is operated by BAM Trading Services based in San Francisco and provides a fast, secure, and reliable platform to buy and sell cryptocurrencies in the United States. Binance.US accounts are currently not supported in the following states: Hawaii, New York, Texas, and Vermont.
Binance.US supports over 350 cryptocurrencies for trade. The platform also offers several different ways for users to buy crypto. For example, users can buy Bitcoin as a one-time or recurring buy on Binance.US. Users who want to buy crypto in larger amounts (greater than $10,000 at a time) can request a price for their entire requested size via otc.binance.us, an over-the-counter trading portal.
Binance.US also offers very low fees. The purchase and trading fees on Binance.US vary between 0.02% to 0.10%. There are 3.5% fees for debit card purchases and a $15 fee for every U.S. wire transfer.
For example, it would cost just $.10 in fees to buy $20 worth of bitcoin using the “Buy Crypto” button in the Binance.US app. Trading fees are automatically deducted from a user’s BNB balance for those holding BNB (Binance’s native cryptocurrency). Users also get a 25% discount on trading fees if using BNB to pay for trading fees. You can view all of the Binance.US fees here.
Regarding security, USD deposits on Binance.US are eligible for FDIC insurance coverage. All U.S. dollars deposits are held in pooled custodial accounts at multiple banks that the FDIC insures. Binance.US also has KYC processes and will require proof of identification for users seeking advanced accounts.
While Binance.US is a popular choice for retail investors, the platform does not offer a built-in digital wallet. Rather, Binance.US encourages users to store their crypto on Trust Wallet. Some investors have also expressed frustration about living in states not supported by Binance.US.

Kraken

Like Binance.US and Coinbase, Kraken is also headquartered in San Francisco. The popular crypto exchange was founded in 2011 and ranks as the third-largest exchange by trading volume, according to CoinMarketCap data. Kraken supports several users worldwide but currently does not offer services to Washington State and New York residents.
Kraken offers a crypto selection of 226 currencies and supports seven fiat currencies. The exchange has several methods available for users looking to fund their accounts with fiat. For example, users can instantly buy crypto with a credit card on Kraken. The fee for credit card transactions is 3.75%. To purchase crypto with fiat, users must complete KYC validation. Once the account is opened, users must wait 72 hours to withdraw funds.
In terms of security, Kraken takes a multi-tiered approach to user verification. Each tier has certain limits and requirements. For instance:
  • Tier-0 requires an email address, which allows users to navigate the site but does not let them make trades
  • Tier-1 requires a user's full name, date of birth, country, and phone number. These users can make deposits and withdrawals only in cryptocurrency.
  • Tier-3 requires a valid government ID and proof of residence. Users in this tier can make fiat deposits and withdrawals up to $25,000 daily and $200,000 monthly.
  • Tier-4 is the highest funding limit level and consists of individual investors and corporations.
Kraken is one of the largest and most popular crypto exchanges in the U.S., as it’s been praised for its ease of use and great customer support. However, some users have noted that not all features are available in the U.S. due to regulations.

Uphold

Although not as large as the other crypto exchanges, Uphold serves more than 10 million customers globally. It serves retail investors and businesses and is supported in many U.S. states.
Uphold offers 250+ cryptocurrencies to trade and uniquely provides an “anything-to-anything” trading experience. For instance, users can trade between cryptocurrencies, precious metals, or stocks on Uphold. There is also a mobile app and a desktop version, making the user experience easy for beginners.
Uphold also offers 0% fees on deposits and withdraws and takes 0% trading commissions. However, it’s not a free platform. Uphold charges a spread or a small fee every time users convert one currency or asset into another. These fees are always presented upfront for users.
Uphold supports users across the globe and adheres to strict KYC requirements. Photo verification and a government-issued ID are required for users to withdraw or deposit funds. Uphold is transparent in that reserves against a user’s funds are displayed in real-time on the Uphold website. To keep a user’s crypto safe, Uphold employs various methods, including encryption, internal and external security teams, a bug bounty program, auditing, and penetration tests.
While Uphold is great for beginner investors, some users have noted that the desktop and mobile apps are not as straightforward as other crypto exchanges.

PayPal

While PayPal is not a cryptocurrency exchange, the popular payment platform now supports four cryptocurrencies: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. PayPal allows U.S.-based customers (except those in Hawaii) to buy, sell and hold these four cryptocurrencies. PayPal partnered with Paxos Crypto Brokerage to ensure options for buying and selling digital assets.
Since PayPal is a familiar platform, it tends to be very easy to use, especially for newcomers. According to the PayPal website, a PayPal Cash or Cash Plus account is required to buy cryptocurrency. Once logged into your PayPal account on a computer, you should see a box on the left-hand side that reads “Buy Bitcoin and other cryptos with PayPal.” Users will then be redirected to another web page to verify their KYC information. Once complete, users can buy the four different cryptocurrencies supported. It’s also worth mentioning that cryptocurrency sold through the PayPal app or website will be converted into fiat, another helpful feature for new investors.
Like any crypto exchange, there are fees associated with buying crypto on PayPal. The website notes that transaction fees are based on how much crypto a user buys or sells. The exchange rate will be presented before buying and selling crypto. There is no fee for holding crypto in your PayPal account.
Best Online Cryptocurrency Exchanges for Retail Investors
Although buying and selling crypto on PayPal is very easy for most users, many feature traditional crypto exchanges offer are not offered on PayPal. For instance, PayPal currently only supports four cryptocurrencies, which is very limiting.
Also, users cannot withdraw funds to other digital or hardware cryptocurrency wallets. Once users buy crypto on PayPal, they can only hold it in PayPal’s digital wallet or withdraw it to their bank accounts. Customers holding crypto on the platform can make purchases from supported online merchants.

Summary table

Crypto Exchange
Number of assets supported in the U.S.
Fees to consider
Coinbase
250
The trading and transaction fees on Coinbase vary between 0.5% to 4.5%
Binance.US
350
The purchase and trading fees on Binance.US vary between 0.02% to 0.10%. There are 3% to 4.5% fees for debit card purchases and a $15 fee for every U.S. wire transfer.
Kraken
226
The fee for credit card transactions is 3.75%.
Uphold
250
Uphold offers 0% fees on deposits and withdraws, taking 0% trading commissions. Uphold charges a spread fee, though.
PayPal
4
Fee of 0.49 USD for purchases between $1–$4.99; 1.50% to 2.49% fees for purchases over $75

FAQs

Which cryptocurrency exchange is best for me?
With so many crypto exchanges to choose from, it can be difficult to determine which is best for your needs. For newcomers, it’s wise to pick a crypto exchange that is supported in your state of residence and offers the digital assets you are most interested in buying, selling, and trading. It’s also helpful to pick an exchange with an easy-to-use interface. Exchanges that include desktop and mobile apps tend to be more user-friendly. Also, crypto exchanges offer different levels of customer support, so choosing an exchange with good customer service is very important, as questions with your account may likely arise moving forward.
Should I use a hardware wallet rather than a crypto exchange to store funds?
Although hardware wallets tend to be more secure than online exchanges, they are also a lot more difficult to use. For instance, hardware wallets require users to control their keys, which is risky if those keys were to be lost (oftentimes lost hardware wallet keys go unrecovered). New investors just getting started with smaller amounts of crypto should consider online exchanges to begin with, as there are several account options suitable for beginners. For advanced users, many crypto exchanges also offer high–level accounts designed to cater to large amounts of crypto being stored.
What additional safety measures should I consider when using an online crypto exchange?
As previously mentioned, most online crypto exchanges require two-factor authentication (2FA). Some may not require this security measure, but it’s highly recommended. Biometric facial recognition is also helpful in some cases, but users must still be cautious as hackers are developing methods to hack into accounts using fake facial recognition. Picking a secure password is also extremely important, as this should be a unique phrase that isn’t similar to any of your other financial account passwords. Storing this password in a safety security box is also recommended (you don’t want to lose your password!). Finally, if you use multiple online exchanges, it’s best to open and check each of those regularly, just as you would with traditional financial accounts.
Do online exchanges offer tax and accounting support?
All crypto holders must consider tax implications if they choose to sell or trade their crypto. Users holding crypto do not have to worry about taxes (since the crypto isn’t being used). While crypto taxes can be complex, most online exchanges are now offering built-in tax services. For instance, Uphold users in the U.S. can connect their accounts with TaxBit, a crypto accounting platform. This ensures that all transactions are run through TaxBit’s tax engine to generate an IRS tax form 8949. When considering an online crypto exchange it may be helpful to check if that platform connects with a tax service.

The bottom line

Although there are many online cryptocurrency exchanges today, determining which is best for your personal needs doesn’t have to be challenging.
Once you know which digital assets you wish to buy, sell, and trade, you can search online to see which crypto exchanges support those assets. Several safe, secure, and regulated exchanges in the U.S. support many popular cryptocurrencies, stablecoins, and altcoins.
When you find a regulated exchange that supports your cryptos of choice, you can set up an account and get started. Keep in mind that KYC processes will be required for most exchanges. Additional security measures like 2FA and facial recognition are also recommended. Writing down your unique password and storing that somewhere safe is a must (you can even write down the password a few times and store it in a few different, secure locations).
After setting up an online account, buying, selling, and trading cryptocurrencies should be pretty straightforward – but remember to consider fees. Some exchanges offer lower fees compared to others, so do your research. If you are concerned about taxes, choosing an exchange with a connected tax service is best.
Finally, contact the exchange's customer service if you encounter any problems with your account. Most exchanges offer attentive users support and can usually help with most issues. It’s also important to note that some exchanges will go down when the price of Bitcoin or other cryptos reaches all-time highs, as the exchanges could be overloaded with transactions. For example, Coinbase has decreased many times due to crypto price action. This is something to be expected, so don’t panic!
My last piece of advice is always to treat your crypto accounts like traditional ones. Check your account (or accounts) regularly to ensure all your funds are accounted for. Navigating the crypto market can be daunting for many new investors, but it will get easier over time.

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